Wednesday, December 28, 2011

Will the Strait of Hormuz Turn Into the Next Pearl Harbor?

Many revisionist historians believe that the United States goaded Japan into attacking Pearl Harbor.

The historian Percy Greaves believed that the attack on December 7, 1941 was neither unexpected nor unprovoked. As his wife, Betina Bien Greaves explained:

[Greaves] was the main counsel for the Republican minority on the Joint Congressional Committee that investigated Pearl Harbor from 1945 to 1946.He attended all its hearings, interviewed many Army, Navy, and Washington principals involved in the attack and in the investigations. He researched diplomatic documents, studied reports and accounts of the event published during the years that followed. He researched diplomatic documents, studied reports and accounts of the event published during the years that followed. This book [Pearl Harbor: The Seeds and Fruits of Infamy] is not about the attack itself. It is about never before presented pre-attack and post-attack events, from the Washington point of view. Without name-calling, innuendo, or slander, Greaves simply presents the pertinent, significant and relevant facts which led the Japanese to attack and the political administration to want to cover-up its involvement.

.Burton Folsom Jr and Anita Folsom write in their new book, FDR Goes to War:

Roosevelt...employed the devious strategy of hindering all oil exports to Japan by adding layers of red tape and freezing Japan's financial assets in what has been called "a silent embargo"...The effect, by late 1941, was a trickle of oil actually going to Japan from the United States.

Bottom line, the U.S. backed Japan into a corner. It was very unwise for the Japanese to attack Pearl Harbor, but the irritation that caused the attack can be clearly seen.

What does this have to do with Iran? Well, we have already frozen some of their assets. On June 29, 2011, the U.S. Department of the Treasury announced the designation of Iran’s national police for providing support to the Syrian regime. The chief and deputy chief of Iran’s national police was also sanctioned.. As a result of the action, U.S. persons are generally prohibited from engaging in transactions with the designees and any assets they may have subject to U.S. jurisdiction are frozen.

On December 20, 2011 U.S. Treasury announced the designation of 10 shipping and other companies and one individual based in Malta affiliated with the Islamic Republic of Iran Shipping Lines (IRISL), as entities facing international sanctions for involvement in" Iran’s efforts to advance its missile programs and transport military cargoes."

“As IRISL and its subsidiaries continue their deceptive efforts to escape the grasp of U.S. and international sanctions, we will continue to take action—as we are today—to expose the front companies, agents and managers working with IRISL and work to stop this illicit business,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.

On December 1, 2011 Cohen told the Senate Committee on Foreign Relations:

The Treasury Department’s increasingly powerful and disruptive sanctions are embedded in the dual-track strategy that the United States and our allies are pursuing to address Iran’s continued failure to meet its international obligations regarding its nuclear program. As Under Secretary Sherman describes in her testimony, the Obama Administration has presented Iran with a genuine opportunity for dialogue, creating a clear choice for Tehran. Iran’s leadership can choose to meet Iran’s international obligations, allowing Iran to deepen its economic and political integration with the world and achieve greater security and prosperity for the Iranian people. Or, Tehran can continue to flout its responsibilities and face even greater pressure and isolation...

Our broad-based pressure strategy is aimed at persuading Iran to change its course and to make clear to Iran the consequences of its continued intransigent behavior. Among the most important elements of this strategy are targeted financial measures designed to disrupt Iran’s illicit activity and to protect the international financial system from Iran’s abuse. We have focused our efforts on exposing Iranian entities’ illicit and deceptive activities, an approach that has garnered support among foreign governments and led them to take similar actions, enhancing substantially the impact of our actions. Because these actions have highlighted the pervasive nature of Iran’s illicit and deceptive conduct and the reputational risks associated with Iran-related business, the private sector around the world has taken notice and has often taken voluntary steps beyond their strict legal obligations, further amplifying government actions.

So what is the big deal? The United States is about to up the ante and dramatically financially isolate Iran. I am talking about the U.S. significantly cutting off Iran's access to oil revenues.

The U.S. Congress just passed a bill that President Obama appears ready to sign that, if fully implemented, could substantially reduce Iran’s oil revenue.

In other words, the U.S. is backing Iran into a corner. The bill could impose penalties on foreign firms that do business with Iran's central bank. Since those that import Iranian oil use the Iranian central bank for the transactions, it would likely cut off that method of Iran selling oil.

Iran is reacting as you would expect most cornered governments would act. Iran’s first vice president Mohammad Reza Rahimid said that Iran could shut down the critical shipping lanes through the Strait of Hormuz in the Gulf, if foreign sanctions are imposed on its oil exports.

The Strait of Hormuz is very important. About 33% of seaborne oil shipments (17% of world oil) go through the Strait of Hormuz. A blocked Strait would force tankers to take longer, more expensive routes that would most assuredly drive oil prices higher.

The thinking has always been that Iran wouldn't shut down the Strait of Hormuz because they use it for their own export of oil. Indeed, in an EPJ Daily Alert in November 2010, I reported:

This afternoon I attended a meeting where the speaker was Capitan Jeffrey Kline. Kline is the Program Director, Maritime Defense and Security Research Programs, Naval Postgraduate School. He is an Adjunct Professor at the Naval War College where he teaches, "Joint Analysis for the Warfare Commander"...Kline...pointed out that it might not be in Iran's interest to close the strait since Iran ships its oil through the Strait.

But, if the United States makes it impossible for Iran to sell its oil, then a key factor that would stop Iran from blocking the strait would be removed.

Does Iran have the capability to block the Strait of Hormuz? I also put that question to Captain Kline. Here's how I reported it in the EPJ Daily Alert:

I thought I would ask Kline, who might have a pretty damn good idea,if the Strait could be closed by Iran. His answer was it could. When I asked him how long it would take, he said 3 or 4 days for Iran to position ships and lay mines. He did say that the blockade could eventually be broken, but it would depend upon international co-operation and that it would take "some time". He said that Iran has missiles onshore aimed at the strait that would have to be taken out,and that Iran had other sophisticated equipment in the area including drones that could listen in on ship communications. He said ship mine sweeping can also get "very tricky".

The [Iranian] navy is in the midst of a 10-day drill in international waters near the strategic oil route. The exercises began Saturday and involve submarines, missile drills, torpedoes and drones. The war games cover a 1,250-mile (2,000-kilometer) stretch of sea off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden near the entrance to the Red Sea as a show of strength and could bring Iranian ships into proximity with U.S. Navy vessels in the area.

Bizarrely, the U.S. has warned Iran that it will not tolerate any disruption of naval traffic through the Strait of Hormuz, that's like stealing a bully's wallet and telling him to shut up and deal with it.

It may not have made any strategic sense for Japan to attack Pearl Harbor, but sometimes you push and push and you get a reaction. The U.S. got a reaction out of Japan. It was Pearl Harbor. The legislation that President Obama is about to sign is a spit in the face of Iran, if it is used to shutdown Iran's ability to sell oil. It may get a reaction out of Iran: The blocking of the Strait of Hormuz.

This is a very high stakes game. No one knows how it will play out. Governments are generally run by mad men, and it is mad men that will decide the next move here.

Iran may have a rational and effective counter move. Maybe a few of them.

1) They can impose a toll on all ships traveling through the straights. I could be mistaken, but Tankers traveling into the straights have to pass through Iranian territorial waters. They are supposedly entitled to free passage, however, Iran might assert a legal loophole of some kind. I'm no international lawyer, but I suspect Iran can come up with some kind of rationale.

This will put the ball back in the US court. Iran can argue it was willing to allow free passage so long as other countries were prepared to allow Iranian oil sales. But now, they have to pay for passage.

Iran has to make any war seem like America started it and not the other way arround. This is better than all out closure.

2) Iran can withdraw from the NPT.

3) Alternatively, if Iran feels unable to do either of those, it can try to sell its oil to Iraq which would resell it to others. That creates a transaction cost, but it could allow them to survive the sanctions.

4) Lastly, Iran can target Saudi Oil terminals through "terrorist" action, while maintaining plausible deniability. This increases world oil prices to the point of serious western pain.

Any of these alternatives are preferable to an outright closure of the straights where the US can easily paint Iran as the bad guy in the eyes of the world.

It would have been nice if your article stated what every thinking person already understands: that there is nothing that Iran can or could ever do to stop the West's escalation of threats and sanctions against it. This has nothing to do with its nuclear program - whether real or imagined. British, American and French oil companies want to turn the clock back to 1953. It's as simple as that.

Does anyone remember the missile attack that downed Iran Air Flight 655, a plane with 290 innocent men, women and children? It was shot down by a US missile fired from an Aegis Cruiser while the cruiser was illegally inside Iranian waters in 1988.

Perhaps we will see more 'accidents' like that to provoke Iran, incidents that the majority of those clamoring for war with Iran have never heard of.

@lysander Doing any of that will give the DC Gang their cause for war. What they should do is go on a charm offensive. All any one knows of Iran is Glowering Mullahs and people in the street burning US flags. The first thing I would do is have that drone delivered back to just outside the White House delivered by the hottest Persian girls they can round up with the message they would like to talk though these issues. Rebuild the US Embassy so the the foggy bottomers can walk back in and stamp passports. Also keeping that buffoon of a President away from Western cameras would be a great help.

Sounds like Obama is just desperate to start a war with Iran. This is the same strategy that got us into Iraq. The very sad part of this is that the movement for democracy in Iran by the people will be completely squashed.They will be forced to back their country against the US if a war starts. What is now a people against their own Government will soon turn into a people against the US government. Remember how happy Iraqis were when Saddam fell,but now after 10 years of US bombs death and displacement those people hate us and we are trying to do the same thing now in Iran.Iran does not have a nuclear weapon and if they did would only use it if they want to be wiped off the earth. This is a poor excuse to do to Iran what has been done in Iraq

Sorry Heath, but the charm offensive was tried before when Mohammed Khatami was president. Before 9/11, he tried very hard to make nice with the Clinton admin, offering lucrative oil contracts to Conoco Phillips. It was blocked in congress and eventually by Clinton. Khatami tried to encourage a "dialogue of civilizations." And he also suspended uranium enrichment. No dice.

Even the current president tried to find a way out of the impasse with the nuclear deal, sponsored by Turkey and Brazil and rejected out of hand by the US.

I'm afraid it is the US objective to either overthrow the Iranian government and replace it with another Shah-like puppet. Or worse, try to break Iran apart into several smaller countries along ethnic lines. The nuclear issue is just one of many excuses. After that would be, "they are aiding Hezbollah." before, they were "Arming Iraqi insurgents." There is no risk of running out of excuses.

Iran's best hope is being able to show that a war would be too costly to profit the west. Barring that, Iran needs to convince most of the world that it was Washington that started the war and not them.

P.S. Returning the drone that violated Iranian airspace and might possibly have been tracking Iranian scientists for later assassination would be a huge mistake.

Lysander, I know that and you know that but what I'm saying they acted like intelligent and competent diplomatic officials, assuming that their opposite numbers were doing the same but totally ignore the propaganda victory they hand the western powers by just being calm and reasoned and not doing much and they need to fight to get their narrative out there.

..."Iran’s leadership can choose to meet Iran’s international obligations, allowing Iran to deepen its economic and political integration with the world and achieve greater security and prosperity for the Iranian people. Or, Tehran can continue to flout its responsibilities and face even greater pressure and isolation"...

Iran's central bank is one of three in the world not controlled by the Fed or the IMF. WTF is this "greater security and prosperity" the West is talking about? Having your country's currency controlled by the Fed that refuses to be audited by Congress, your investment markets controlled by evil and unscrupulous men on Wall St. who pollute world economies with junk loans and worthless derivatives, and politicians that make millions from personal investments in munitions companies and corporate handouts for enabling their monopolies?